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Numbers start to add up
Richard Delevan



OUcan learn about a company in its canteen. I'm early . . . a rarity . . . for my appointment with Denis Creighton and the Conduit receptionist has kindly let me wander down with the shift that starts at 9am.

The predominately young faces behind the voices that answer when you dial 11850 are trickling in with the odd yawn. There is hot food, pastries, cereals. But in any tech-related business . . . and while Conduit may be on the less glamourous end of technology, its call centres are still part of the tech ecosystem . . . it's the coffee that tells the tale.

Microsoft's Sandyford headquarters canteen wasn't complete until it served Starbucks coffee. With the reputation that outsourced call centres have, I was expecting no-name generic swill. Instead, it's got the quite swishy Java Republic. Granted, it's a machine and not a barrista, but it's not a blend that an archetypal black-turtlenecked, black-frame-bespectacled software or marketing tech character would turn his nose up at.

This level of pampering isn't bad for a company which, since its founding 10 years ago, has had more near-death experiences than your local A&E. Or for an industry . . . call centres . . .

that has been called the sweatshops of the 21st century. Creighton mentions this before I can ask about it.

"You saw the canteen? It's not necessarily the common practice for call centres. People work hard. We offer full breakfast, full dinners. We believe you've got to keep your people happy. It will be reflected in their interaction with a customer."

Conduit is a people business, and, unusually, seems to recognise this fact. Creighton, raised in Hospital, Co Limerick, came to Dublin in the mid-1980s to work with what was then Post & Telegraphs. In a Telecom-sponsored programme, he studied at night . . . first accounting, which he didn't enjoy, then technology. He rose through high-profile projects, and became Eircell's 101st employee in 1997.

In a market where getting and keeping staff is difficult, with 2% unemployment, in a business whose employees are predominantly universityaged, he stresses Conduit's commitment to training. Conduit's senior managers have largely risen through the ranks, he says, something that sends a message to employees.

One of his last jobs in Eircom before joining Conduit in 2001 was setting up 11811, something that haunts him. Or at least the jingle he commissioned, set to the tune of a Beautiful South track, which continues to this day.

Almost certainly you have spoken with someone in Conduit's call centres. Besides the 11850 directory enquiries service, the company also handled the outsourced directory enquiries for Vodafone and O2. If you've rung Bord Gais in the past couple of years, it would have been a Conduit employee who took your call. Ditto with the inbound calls from holidaymakers seeking information from Tourism Ireland.

Creighton was happy to speak last week because the company's acquisition by InfoNxx in April of this year has gone well. 11850 has around 35% of the market and is planning a major marketing campaign, leveraging the marketing talent of its new parent, which launched the 118118 service in the UK with its iconic moustachioed twins.

The company is staffing up. Conduit is adding to its 650 employees in Ireland out of a total of more than 1,500 in markets including the UK, Austria and Switzerland.

"It's in some ways an Irish success story, " says Creighton. He admits, however: "we've gone through what you could only call an MBA in practice."

In 10 years, Conduit went from eight employees in 1996 to rapid growth, first- and secondround finance, an IPO, the dotcom collapse, then a take-private by management in 2003. A disastrous foray into UK directory inquiries in 2003 nearly bankrupted the company, requiring a distress refinancing and, 16 months later, the sale of the company to a bigger competitor.

The acquisition has refocused Conduit on the business it started out in . . . providing outsourced customer service departments to big corporates and semi-states. In fact, revenues from the customer care side of the business are where the growth is. Two years ago, just 25% of Conduit's revenues came from customer care businesses. Now it's 50:50. Next year, Creighton expects that 75% of his revenues will come from those customer care call centres.

This may seem surprising to anyone who has read Tom Friedman's The World Is Flat, which described the rise of Indian call centre giants and their partners, like Infosys. Indian labour is cheaper, educated and English-speaking . . .

something that was said of Ireland at the time Conduit was set up. But there has been a backlash against Indian call centres. British bank NatWest even uses the fact that it doesn't place its call centres in India as a point of differentiation in its ads.

Creighton explains: "There are some elements that, taken offshore, can work very well . . . back-end process, some software development. But customer-facing people? People expect not to have to explain themselves two or three times, that their diction will be understood. Let me give you an example. I rang up for the number of a B&Q. We all know what B&Q is in Ireland and the UK. But I was asked, 'how do you spell that?' 'B-E-A, B-E-E' . . . and then you realise you can't expect somebody to be familiar with that if they're not in the jurisdiction."

"I think that's one of the reasons a lot of that work is coming back onshore in Ireland and in the UK. The calibre of some of our customers lets people say, well if some of the big players and semi-states have gone into outsourcing, it's worth looking at, worth doing. And potentially a most cost-efficient way of handling your customer care."

Creighton shows me slides from a recent presentation he made, putting the market value of call centre outsourcing in western Europe at 5.5bn in 2007, with compound annual growth of around 8% for the years 2004 to 2007. What makes this remarkable is that, before the backlash against outsourcing to developing markets, the expected growth was half that.

Conduit has also benefited from the switch to mobiles, Creighton says. Five years ago, just a third of the calls to 11850 came from mobiles.

Now that proportion has doubled.

If there's one thing Creighton learned from Conduit's near-death experience in 2003, it's the importance of coping with the unexpected, he says. The UK directory inquiries market collapsed just at the moment Conduit launched its 118888 number there. British consumers were used to the one 192 number. A sudden explosion of choices brought with it heightened consumer awareness of the cost, which had to be prominent in the advertising for the first time.

The size of the market was halved in 12 months. Even though Conduit came in with a price half that of BT, it found that price wasn't as important as other factors, including the brand. The most successful new brand was 118118, owned by InfoNxx which . . . under a complicated deal that saw Conduit purchased for 90m by South African private equity group Investcorp with InfoNxx as a minority buyer . . .

is now Conduit's parent company.

Creighton's vigilance as a result now extends to emerging threats like VoIP . . . voice over internet protocol . . . which will threaten the mobile phone networks that are the source of two-thirds of the calls to 11850. When you can use a service like Skype from your handset to ring another person, how will 11850 survive?

Creighton reveals that Conduit is already in early-stage talks with Skype for a billing agreement across Europe . . . proof, perhaps, that the company is determined to learn from its past.

CV DENIS CREIGHTON Born 1963 in Hospital, Co Limerick. Rose through the ranks of Telecom Eireann, into Eircell and launched 11811 within Eircom. Joined Conduit in 2001.

Lives in Maynooth. The commute from the EastPoint Business Park can take up to two hours and 10 minutes, so he waits out the traf"c or takes the motorbike.

Married with four children. Says weekends are "family time, sacrosanct".

CONDUIT Founded 1996 with eight employees.

June 2000: Conduit initial public offering in Ireland and Germany.

2002: in its last year as a public company, Conduit reports revenues of 32m.

January 2003: After the dotcom crash, Conduit is taken private by management and core investors.

March 2003: Launched 118888 in the UK September 2003: Following the disastrous foray into the UK, chief executive Liam Young resigns for what the company says are "personal reasons".

April 2006: Company acquired by InfoNxx.




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